Correlation Between Century Therapeutics and Kymera Therapeutics

Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Kymera Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Century Therapeutics and Kymera Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Century Therapeutics and Kymera Therapeutics, you can compare the effects of market volatilities on Century Therapeutics and Kymera Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Century Therapeutics with a short position of Kymera Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Kymera Therapeutics.

Diversification Opportunities for Century Therapeutics and Kymera Therapeutics

0.6

Correlation Coefficient

Century Therapeutics  Kymera Therapeutics

Poor diversification

The 3 months correlation between Century and Kymera is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Kymera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kymera Therapeutics and Century Therapeutics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Century Therapeutics are associated (or correlated) with Kymera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kymera Therapeutics has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Kymera Therapeutics go up and down completely randomly.

Pair Corralation between Century Therapeutics and Kymera Therapeutics

Given the investment horizon of 90 days Century Therapeutics is expected to generate 4.59 times less return on investment than Kymera Therapeutics. But when comparing it to its historical volatility, Century Therapeutics is 1.42 times less risky than Kymera Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Kymera Therapeutics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,857  in Kymera Therapeutics on May 6, 2025 and sell it today you would earn a total of  1,509  from holding Kymera Therapeutics or generate 52.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Century Therapeutics  vs.  Kymera Therapeutics

Century Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Century Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Century Therapeutics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Kymera Therapeutics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kymera Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady primary indicators, Kymera Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Century Therapeutics and Kymera Therapeutics

The main advantage of trading using opposite Century Therapeutics and Kymera Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Kymera Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kymera Therapeutics will offset losses from the drop in Kymera Therapeutics' long position.

The idea behind Century Therapeutics and Kymera Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.